The carbon pricing debate: Where do you stand?

Six top oil and gas chief executives from BP, BG Group, Shell, ENI, Total and Statoil have urged to introduce carbon pricing systems to tackle climate change.

The chief executives said, “Our industry faces a challenge: we need to meet greater energy demand with less CO2. We are ready to meet that challenge and we are prepared to play our part.”

This represents a clear commitment from Europe’s main oil and gas companies to reduce carbon emissions and take leadership for a future with less pollution.

In a joint letter to the United Nations Framework Convention on Climate Change (UNFCCC), Bob Dudley, Helge Lund, Ben van Beurden, Claudio Descalzi, Patrick Pouyanné and Eldar Sætre said that, “Carbon pricing will discourage high carbon options and reduce uncertainty that will help stimulate investments in the right low-carbon technologies and the right resources at the right pace.”

A new carbon-pricing scheme would lead to a switch from coal to gas in power generation. The use of natural gas is thought to have a crucial role to play to reduce carbon emissions while meeting growing energy demand.

However, US companies such as ExxonMobil, Chevron, and ConocoPhillips did not sign the letter. At the WGC in Paris, Total’s Pouyanné said, “I have talked with the US majors but got different answers”.

During a panel discussion ExxonMobil’s Robert Franklin was asked why Exxon did not join the European initiative, and he replied “We have had discussions with European majors, and we wish them well, but we don't believe we need to join this scheme".

ExxonMobil’s CEO, Rex Tillerson, added that CO2 emissions continue to drop in the US thanks to shale gas production and there is no need of putting a price on carbon.

At a conference in Vienna, Chevron CEO John Watson said that the proposed new carbon-pricing scheme is not the answer as the cost of energy would be too high and “customers want affordably energy”.

“I don’t think that putting a price on carbon is necessarily the answer. I’ve never had a customer come to me and ask to pay a higher price for oil, gas or other products.”

IEA’s Director Maria van der Hoeven did not agree and said a pricing system for carbon “is very welcome, and I encourage those who have not yet taken that step to follow suit. A realistic and effective carbon price is an essential component of the modern energy system.”

Shell Ben van Beurden believes governments and the UN should now introduce carbon–pricing mechanisms and an international framework to connect the national systems.

Where do you stand? Are you in favour or against global carbon taxes? Let us know your views below.

The shale gas revolution, brought about through the combination of hydraulic fracturing (“fracking”), horizontal drilling technologies has slashed consumer prices for both gas and electric in this country, while reducing air emissions by incredible vol

It is well known that unconventional gas – shale gas, tight gas, and natural gas associated with shale oil production – has transformed natural gas supply across North America. Currently, about 60 billion cubic feet of unconventional gas is produced d

Contributed by: RokuheiFukui, Consultant, John Hopkins School of Advanced International Studies (SAIS)

Though gas production has stabled in recent years, during the boom period from 2007 to 2012 shale gas production in the US expanded at an astounding average growth rate of over 50% per year, and thereby increased nearly tenfold over this short time per

In order to encourage pilot projects for the exploration and exploitation of shale gas in Pakistan and to make such discoveries commercially viable, the following special incentives are recommended for pilot projects testing and production phases:

Successful exploration and development of shale gas in the United States and Canada suggest a new solution to the energy crisis in developing countries like Pakistan. Pakistan has more than 827,365 sq.km sedimentary basin area (611,307 sq.

The shale gas revolution, brought about through the combination of hydraulic fracturing (“fracking”), horizontal drilling technologies has slashed consumer prices for both gas and electric in this country, while reducing air emissions by incredible vol

It is well known that unconventional gas – shale gas, tight gas, and natural gas associated with shale oil production – has transformed natural gas supply across North America. Currently, about 60 billion cubic feet of unconventional gas is produced d

Contributed by: RokuheiFukui, Consultant, John Hopkins School of Advanced International Studies (SAIS)

Though gas production has stabled in recent years, during the boom period from 2007 to 2012 shale gas production in the US expanded at an astounding average growth rate of over 50% per year, and thereby increased nearly tenfold over this short time per

In order to encourage pilot projects for the exploration and exploitation of shale gas in Pakistan and to make such discoveries commercially viable, the following special incentives are recommended for pilot projects testing and production phases:

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